Chevron Corporation recently reported earnings of US$3.1 billion (US$1.64 per share – diluted) for fourth quarter 2017, compared with US$415 million (US$0.22 per share – diluted) in the 2016 fourth quarter. Included in the quarter were non-cash provisional tax benefits of US$2.02 billion related to U.S. tax reform and a non-cash charge of US$190 million related to a former mining asset.

Foreign currency effects decreased earnings in the 2017 fourth quarter by US$96 million. Full-year 2017 earnings were US$9.2 billion (US$4.85 per share – diluted) compared with a loss of US$497 million (US$0.27 per share – diluted) in 2016. Included in 2017 were non-cash provisional tax benefits of US$2.02 billion related to U.S. tax reform, gains on asset sales of US$1.44 billion, and impairments and other non-cash charges of US$840 million. Foreign currency effects decreased earnings in 2017 by US$446 million. Sales and other operating revenues in fourth quarter 2017 were US$36 billion, compared to US$30 billion in the year-ago period.

“Earnings and cash flow grew significantly in 2017,” said Chairman and CEO Michael Wirth. “We achieved our objective of being cash flow positive through deliberate actions to reduce capital expenditures, lower our cost structure, start and ramp-up projects, and conclude planned asset sales. Higher commodity prices helped as well. These improvements give us the confidence to increase the dividend by US$0.04 per share, which puts us on track to make 2018 the 31st consecutive year with an increase in annual dividend pay-out.” “We replaced more than 150 % of the reserves we produced, and reached several significant upstream project milestones in 2017,” Wirth added. “These included our first LNG shipments from Train 3 at Gorgon and Train 1 at Wheatstone in Australia. We also posted impressive production growth in the Permian Basin in the U.S.”

The company added approximately 1.54 billion barrels of net oil-equivalent proved reserves in 2017. These additions, which are subject to final reviews, equate to approximately 155 % of net oil-equivalent production for the year. The largest additions were from the Permian Basin in the United States and the Gorgon Project in Australia.

The company will provide additional details relating to 2017 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 22, 2018.

“Our net oil-equivalent production grew by 5 % in 2017, including the effects of asset sales,” Wirth commented. “Importantly, we expect that our 2018 production will continue to grow by 4 to 7 %, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve.” “In the downstream, we made significant progress on our growth investments,” Wirth added. Chevron Phillips Chemical Company LLC, the company’s 50 %-owned affiliate, achieved start-up of two polyethylene units and reached mechanical completion of a new ethane cracker at its U.S. Gulf Coast Petrochemicals Project in Texas. At year-end, balances of cash, cash equivalents and marketable securities totalled US$4.8 billion, a decrease of US$2.2 billion from the end of 2016.

Total debt at December 31, 2017 stood at US$38.8 billion, a decrease of US$7.4 billion from a year earlier. The company’s Board of Directors approved a US$0.04 per share increase in the quarterly dividend to US$1.12 per share, payable in March 2018.

UPSTREAM Worldwide net oil-equivalent production was 2.74 million barrels per day in fourth quarter 2017, compared with 2.67 million barrels per day from a year ago. Net oil-equivalent production for the full year 2017 was 2.73 million barrels per day, compared with 2.59 million barrels per day from the prior year.

U.S. upstream operations earned US$3.69 billion in fourth quarter 2017, compared with earnings of US$121 million from a year earlier. The improvement reflected a benefit of US$3.33 billion from U.S. tax reform along with higher crude oil realizations, partially offset by the absence of gains on fourth quarter 2016 asset sales. The company’s average sales price per barrel of crude oil and natural gas liquids was US$50 in fourth quarter 2017, up from US$40 a year earlier.

The average sales price of natural gas was US$1.86 per thousand cubic feet in fourth quarter 2017, compared with US$1.98 in last year’s fourth quarter. Net oil-equivalent production of 671,000 barrels per day in fourth quarter 2017 was down 11,000 barrels per day from a year earlier.

Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico, and base business in the Gulf of Mexico, were more than offset by the impact of asset sales of 57,000 barrels per day, normal field declines, higher downtime and hurricane effects in the Gulf of Mexico. The net liquids component of oilequivalent production in fourth quarter 2017 increased 2 % to 518,000 barrels per day, while net natural gas production decreased 12 % to 920 million cubic feet per day primarily as a result of asset sales.

International upstream operations earned US$1.60 billion in fourth quarter 2017, compared with US$809 million a year ago. The increase in earnings was mainly due to higher crude oil realizations and higher natural gas sales volumes, partially offset by higher depreciation expense associated with higher production. Foreign currency effects had an unfavorable impact on earnings of US$20 million between periods. The average sales price for crude oil and natural gas liquids in fourth quarter 2017 was US$57 per barrel, up from US$44 a year earlier. The average price of natural gas was US$4.93 per thousand cubic feet in the quarter, compared with US$4.07 in last year’s fourth quarter. Net oil-equivalent production of 2.07 million barrels per day in fourth quarter 2017 was up 82,000 barrels per day from a year earlier. Production increases from major capital projects, primarily Gorgon and Wheatstone in Australia and Angola LNG, were partially offset by production entitlement effects in several locations, normal field declines, and the impact of asset sales of 27,000 barrels per day. The net liquids component of oil-equivalent production decreased 3 % to 1.20 million barrels per day in the 2017 fourth quarter, while net natural gas production increased 16 % to 5.24 billion cubic feet per day.

U.S. downstream operations earned US$1.20 billion in fourth quarter 2017 compared with breakeven a year earlier. The increase was primarily due to a US$1.16 billion benefit from U.S. tax reform. Also contributing to the increase were higher margins on refined product sales primarily reflecting the absence of fourth quarter 2016 planned turnaround activity at the Richmond refinery, and lower operating expenses. Partly offsetting these effects were impacts from Hurricane Harvey at the 50 %-owned Chevron Phillips Chemical Company’s Cedar Bayou, Texas, petrochemical plant. Refinery crude oil input in fourth quarter 2017 increased 16 % to 834,000 barrels per day from the year-ago period, primarily due to the absence of fourth quarter 2016 planned turnaround activity at the Richmond refinery, partially offset by a planned turnaround at the El Segundo refinery and impacts from Hurricane Nate at the Pascagoula refinery. Refined product sales of 1.17 million barrels per day increased 3 % from fourth quarter 2016, primarily due to increased diesel sales. Branded gasoline sales of 518,000 barrels per day decreased 1 % from the 2016 period.

International downstream operations earned US$84 million in fourth quarter 2017, compared with US$357 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales. Foreign currency effects had an unfavorable impact on earnings of US$115 million between periods. Refinery crude oil input of 761,000 barrels per day in fourth quarter 2017 decreased – 4 – – MORE – 40,000 barrels per day from the year-ago period mainly due to the sale of the company’s Canadian refining asset in third quarter 2017, partially offset by increased crude runs at the company’s affiliate, Singapore Refining Company. Total refined product sales of 1.52 million barrels per day in fourth quarter 2017 were up 2 % from the year-ago period, primarily due to higher fuel oil sales.

All other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies. Net charges in fourth quarter 2017 were US$3.46 billion, compared with US$872 million a year earlier. The change between periods was mainly due to higher tax items, primarily reflecting a US$2.47 billion expense from U.S. tax reform, and a reclamation related charge of US$190 million for a former mining asset. Foreign currency effects decreased net charges by US$13 million between periods.

Cash flow from operations in 2017 was US$20.5 billion, compared with US$12.8 billion in 2016. Excluding working capital effects, cash flow from operations in 2017 was US$20.0 billion, compared with US$13.4 billion in 2016.

Capital and exploratory expenditures in 2017 were US$18.8 billion, compared with US$22.4 billion in 2016. The amounts included US$4.7 billion in 2017 and US$3.8 billion in 2016 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Upstream expenditures represented 87 % of the company’s investments.